So, if you're a content provider, why would you use anything other than a real ICANN-recognized domain?
An example was given earlier of a site using xn-- encoding to use a non-Latin script in the TLD and domain name. If you are a business in a country which uses non-latin scripts then it is perfectly understandable why you would want to use your real name rather than some pidgin representation like Yoonahytid Steyts uv Amerika. It is common in the corporate world for new products or improved products to be "launched" with a marketing effort through a wide variety of media. One sure way to get lots of free media coverage would be for a company to use a non-ICANN domain and send instructions to ISPs on how to "enable" their network for the big new launch. The very fact that people will have difficulty getting to the site can be leveraged in a marketing campaign. And what are domain names after all, if not marketing?
or when something is rolled out to a large enough self-contained user community that the lack of ability to communicate outside that region won't be a significant barrier.
That's generally how new things get a foothold... --Michael Dillon